Recent Grad - First job - Need advise on savings + current accounts

psychic_teabag

Tomo8281 wrote: »

Ahh good point, I'm still in the "short-term" mindset. So say if I set up a ISA (halifax) account now, can I put £100 a month (until the limit is reached) into a ISA and take bits out now and again, or should I use a regular online savings account for that and create an ISA account in a year or two when I have a 'lump' of money to put in a fixed account and leave it for a year?

In the short term, a regular saver may pay more interest, but if you don't get money into an ISA by end of the tax year, this year's allowance is gone forever.

At £100 per month, you're short of the annual limit of around £5k, so it doesn't matter all that much whether you put £400 into an ISA this year, and £1200 next year, vs £1600 next year. But at a higher rate of saving, it might make a difference.

On a related note, if you expect to reach the allowance, it's best not to take bits out now and again since that part of the allowance is lost. If you are thinking long-term, and might need the money, it might be better to keep some aside in a non-ISA account, and then put it into the ISA if you're pretty sure you won't need to withdraw it.